A cooling, carbonation and dispensing system for use with a liquid in a keg includes a cooling ring mounted on top of the keg. The cooling ring includes a toroidal-shaped shell into which dry ice is placed. The cooling ring and dry ice provide contact cooling of the keg, as well as carbon dioxide gas by sublimation of the dry ice to carbonate the liquid in the keg and pressure on the liquid so that it may be dispensed from the keg. A chilling unit having a hose bundle is mounted on top of the cooling ring. A liquid dispensing hose from the keg coupler on the keg connects to the hose bundle, so that liquid from the keg passes through the hose bundle. A lid having a tower is attached to the top of the chilling unit and latched to it to form a water-tight seal. Another hose connects to the hose bundle in the chilling unit and conducts the liquid to a dispensing hose attached to a dispenser in the tower. Wet ice is placed in the chilling unit and the tower to provide further chilling (flash chilling) of the liquid. The components of the assembled system may be wrapped in an insulating blanket to provide further cooling.